Dive Brief:

• FedNow has begun disbursing instant disaster relief payments via participating financial firms, according to a press release.
• The first financial institution to receive an instant disaster relief payment was CB&S Bank of Russellville, Alabama, which has 56 locations in Alabama, Georgia, Tennessee and Mississippi, the Sept. 17 announcement said.
• The distribution is part of the U.S. Treasury’s use of the FedNow Service for government payments through the Bureau of the Fiscal Service’s Digital Pay program, according to the announcement.

Dive Insight:

The Treasury’s Bureau of the Fiscal Service distributes and collects funds on behalf of the U.S. government using ACH payments, wire transfers and checks. The agency integrated the FedNow Service in July 2023, the release noted. FedNow went live that same month for banks and credit unions. 

About 1,400 U.S. banks and credit unions use FedNow’s real-time payments service for faster payments. FedNow processed 2.1 million transactions in the second quarter of 2025.

“The ability to receive these types of federal agency disbursements instantly via the FedNow Service will be a game-changer for individuals and businesses, especially in disaster or emergency situations where speed really matters to the recipient,” Mark Gould, chief payments executive for Federal Reserve Financial Services, said in a statement.

Along with disbursing payments to Americans in need, FedNow has made changes within its service to accommodate banks and credit unions handling large transactions. Earlier this year, FedNow raised its transaction limit to $1 million. In September, the service announced plans to boost its limit again to $10 million in the coming months. 

With the higher threshold, FedNow enables financial firms to set transaction limits for their operations according to their business needs and internal risk assessments. In June, FedNow also introduced additional security features, including limits on the dollar amount and transaction speed depending on the customer. The RTP network, operated by The Clearing House, raised its transaction limit to $10 million in February.

Separately, FedNow said Tuesday it had begun a pilot program on a new “network intelligence tool” with six organizations, including Jack Henry & Associates and U.S. Bank, to reduce fraud. The tool will allow “sending financial institutions to request information via an API about a receiver account before submitting a transaction” to FedNow, the service said in a press release.

The tool is aimed at identifying risks with a potential payment with a “pre-check” on a receiver account. That will help participating companies leverage network-level data to “complement their own payment data and fraud mitigation processes to decide whether to proceed with sending a payment,” FedNow said.